Major markets continue to flip-flop. Major earnings announcements are on the horizon. If we get some positive earnings surprises from some of the bigger companies who are announcing, the stock market could react favorable to that news. The European debt situation, as is the same every day recently, still hangs over the market and may be the main cause preventing the stock market from continuing rallies. Chinese growth numbers are also not looking that great, so global risk markets are feeling the effects of promising U.S. economic data combined with the less positive European debt situation plus a China slowdown. News today of the World Bank cutting China’s growth forecast did not help perceptions of China’s economic potential in the near term.
Many soft commodities have been seeing strong selling recently. Orange Juice is leading the way down today, in the red by -1.65% as of this writing. After its surprise strong rally with 1 “limit-up” day last August, OJ has not been able to sustain that rally and has actually turned back around. We see two important downward trend lines intact. OJ is also trading below our key pivot price of 1.18. We see the next important downside price target at the 1.07 level. Furthermore, we see potential for this market to keep the selling going until hitting our technical downside target of 1.01. With signs of higher output in Florida, we see the key psychological level of one dollar being an attractive force for the orange juice futures market.
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